The gatekeepers of German business: How companies attain coveted key positions
Successful companies often have particularly extensive networks. Within these networks, they frequently attain the coveted position of a gatekeeper, mediating between different markets and industries. A new study by Martin Luther University Halle-Wittenberg (MLU) and Goethe University Frankfurt shows how they manage to do this. Researchers analysed the co-operative relationships of Germany’s 500 largest companies. The study was published in the „European Management Journal“.
Gatekeepers play a key role in business networks because they connect markets and industries that would otherwise have no ties to one another. Newly connected companies are not the only ones to benefit from this. „The gatekeeper acts as a link, controlling the flow of information and gaining new insights from a wide variety of business sectors,“ explains Professor Nicolas Zacharias from MLU. „Such a company stands out from its competitors, is more innovative and subsequently achieves higher profits.“
To obtain the necessary data for their study, the team of researchers used a self-developed „data crawling tool“ i.e., an algorithm that searched through company press releases from 2006 to 2014. As soon as two companies were mentioned in a collaborative context in a document, the tool saved the corresponding text. The final analysis included 1,453 results, which the team classified into three categories: „Cooperation was categorised as weak, moderate or strong depending on how intensively the companies interacted with each other,“ explains Zacharias. For example, a membership in the same association was considered to be a weak tie, while researchers ranked joint projects and consortia as moderate ties, and companies with fixed contracts that exchanged capital were classified as having strong connections.
When analysing the data from the press releases alongside information from annual reports, such as profits and patent applications, it became clear that mid-sized collaborations led to the coveted gatekeeper position. This surprised the researchers: „It has long been assumed that weak connections provide the most benefit,“ says Zacharias. The further a collaboration extends beyond its own industry, the weaker the connection generally is between the interacting companies. Even though the contact brings with it new resources and ideas without an overlap of business areas and know-how, the lower sense of commitment between the companies means that the new insights usually are not implemented in a profitable way.
In 2014, Daimler, Robert Bosch GmbH, BASF, Airbus Group and Deutsche Telekom were among the most successful gatekeepers in Germany. „Large companies have many contacts and are very diversified,“ says Zacharias. Therefore, it is not surprising that precisely these companies attain gatekeeper status. However, the new study reveals how they manage to do this. „Companies should dare to look beyond their own industry and participate in joint research projects or other mid-sized collaborations,“ Zacharias advises. Even weak connections make sense, he says, because they have the potential to develop into something more.
Study: Nicolas A. Zacharias, Dace Daldere, Oliver Hinz. Which collaborations allow firms to become gatekeepers? A longitudinal analysis of a large-scale collaboration network. European Management Journal (2021). https://doi.org/10.1016/j.emj.2021.09.008